Discuss the following:
Does large firm size, pure and simple, give rise to monopoly profits? This question has been a source of great interest in both business and government and the basis for lively debate over the years...
A. From the variables given: Build a model to test, i.e., choose the dependent variable and the independent variable or variables. You must justify your choice of independent variable and independent variables or variables (this means justifying excluding variables as well). You must also justify your choice of a linear or non-linear model.
B. Carefully and completely explain your results.
C. Test- conduct all the hypothesis tests in the class notes on your model.
TABLE
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| Net Profit, Net Worth, Total Assets, and Sales Revenue for 25 Glbal Giants |
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| with Sales Revenue of More Than $42.3 Billion |
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| Company Name |
Industry |
Net Income |
Net Worth |
Total Assets |
Sales |
ROE |
ROA |
MGN |
| General Motors |
Auto |
5,576 |
20,862 |
274,730 |
176,558 |
26.7% |
2.0% |
3.2% |
| Wal-Mart Stores |
Retail |
5,709 |
25,843 |
70,349 |
165,013 |
22.1% |
8.1% |
3.5% |
| Ford Motor |
Auto |
7,237 |
27,537 |
276,229 |
162,558 |
26.3% |
2.6% |
4.5% |
| Exxon Mobil Corp |
Oil |
8,380 |
63,466 |
144,521 |
160,883 |
13.2% |
5.8% |
5.2% |
| DaimlerChrysler |
Auto |
5,173 |
36,313 |
175,889 |
151,035 |
14.2% |
2.9% |
3.4% |
| Toyota Motor |
Auto |
4,540 |
65,116 |
154,884 |
119,656 |
7.0% |
2.9% |
3.8% |
| Shell Transport |
Oil |
7,531 |
56,171 |
113,883 |
105,366 |
13.4% |
6.6% |
7.1% |
| Royal Dutch Petr. |
Oil |
7,531 |
56,171 |
113,883 |
105,366 |
13.4% |
6.6% |
7.1% |
| Int'l Business Mach. |
Computer |
6,962 |
20,511 |
87,495 |
87,548 |
33.9% |
8.0% |
8.0% |
| BP Amoco |
Oil |
6,204 |
43,281 |
89,561 |
83,566 |
14.3% |
6.9% |
7.4% |
| Philip Morris |
Tobacco |
7,675 |
15,305 |
61,381 |
78,596 |
50.1% |
12.5% |
9.8% |
| Total Fina Elf |
Oil |
3,372 |
27,857 |
81,533 |
75,545 |
12.1% |
4.1% |
4.5% |
| Hitachi, Ltd. |
Electronics |
160 |
27,134 |
92,804 |
75,483 |
0.6% |
0.2% |
0.2% |
| Matsushita Elec. |
Electronics |
950 |
33,021 |
73,208 |
69,500 |
2.9% |
1.3% |
1.4% |
| Sony Corp |
Electronics |
1,149 |
20,593 |
64,219 |
63,082 |
5.6% |
1.8% |
1.8% |
| AT&T Corp |
Telecom |
5,450 |
85,253 |
169,406 |
62,391 |
6.4% |
3.2% |
8.7% |
| Boeing |
Defense |
2,030 |
11,462 |
36,147 |
57,993 |
17.7% |
5.6% |
3.5% |
| Honda Motor |
Auto |
2,476 |
18,211 |
46,212 |
57,536 |
13.6% |
5.4% |
4.3% |
| Nissan Motor |
Auto |
-6,456 |
8,767 |
61,709 |
56,388 |
-73.6% |
-10.5% |
-11.4% |
| Gen'l Electric |
Electronics |
10,717 |
42,557 |
82,583 |
55,645 |
25.2% |
13.0% |
19.3% |
| SBC Communications |
Telecom |
7,439 |
27,726 |
83,215 |
48,960 |
26.8% |
8.9% |
15.2% |
| NEC Corp. |
Electronics |
99 |
9,303 |
43,895 |
47,538 |
1.1% |
0.2% |
0.2% |
| Kroger Co. |
Grocery |
966 |
2,683 |
17,966 |
45,352 |
36.0% |
5.4% |
2.1% |
| Unilever |
Food |
2,930 |
15,197 |
32,816 |
43,650 |
19.3% |
8.9% |
6.7% |
| Hewlett-Packard |
Computer |
3,125 |
18,295 |
35,297 |
42,370 |
17.1% |
8.9% |
7.4% |
| Averages |
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4,277 |
31,145 |
99,353 |
87,903 |
13.7% |
4.3% |
4.9% |
Attachment- The probability effect of large firm.rar